Tenants to find opportunities in Sydney

The latest Real Estate Institute of New South Wales (REINSW) Vacancy Rate Survey has good news for anyone planning on moving into the city.

Residential vacancy rates in the Harbour City rose for a second consecutive month according to the May 2014 survey. Properties available for rent grew by 0.2 per cent to reach a total of 1.9 per cent.

Middle Sydney suburbs, such as Parramatta, Manly and Canterbury, saw the most significant increase at 0.5 per cent month-on-month, putting the area’s vacancy rate at 2.5 per cent. Inner Sydney suburbs, such as Woollahra, Waverley and North Sydney, also saw a notable jump in vacancies, climbing 0.3 per cent to 1.9 per cent.

The completion of a number of large scale apartment projects is behind the increase in rental availability, said the REINSW in a June 16 release.

Not all parts of Sydney saw a comparable rise. Outer Sydney suburbs saw their vacancy rate fall by 0.1 per cent to a total of 1.6 per cent, placing them as the hardest places in Sydney to find rental accommodation. These suburbs include Blacktown, Fairfield, Penrith and Sutherland. This puts those investors with an outer Sydney property in a particularly good position. Not only do tighter vacancy rates typically translate into higher rent yields, but it could also encourage further investment in the area that may further drive up prices.

This comes on top of news earlier this year from the Australian Property Monitors (APM) that Sydney has remained the most expensive Australian capital city for tenants, with a median weekly asking house rent of $500 over the December quarter and $490 for units. At the same time, the APM noted, house rents stayed steady over the 12 months to April.

This could all be good news for real estate investors in the city who are renting out property, or are considering it an option. While the increased availability of accommodation is typically a good thing for tenants, and can mean a decline in yield for owners, Sydney’s easing vacancy rate has the potential to draw in a greater number of tenants to the growing city – which could pay off for property holders in the long run.